Leadership

Editor’s Note: LiquidPlanner 3.0 is a unique online project-management tool built around a new approach to estimation and scheduling and a highly social easy-to-use design. Sandhill.com asked CEO and Co-Founder Charles Seybold to share his insights and advice regarding the challenges, pain points and tradeoffs that software developers and entrepreneurs face as they race to market. He also explains what’s wrong with the traditional project-management approach and how it impacts software development.

When entrepreneurs and startups ask me for advice, I share two important aspects of our journey developing LiquidPlanner. First, if you’re going to innovate, be prepared to stick to your guns. Second, if you don’t make a plan and work your plan, you’re going to be in a constant state of chaos, and that turns people off.

Every company has to make some tradeoffs along the way in their race to the market. But if you follow these two pieces of advice, you’ll be able to make the better decisions when a tradeoff is needed.

Innovation requires sticking to your guns

At the outset with LiquidPlanner, we made the choice to attack the project management marketplace with innovation because the market was basically asleep at the wheel. Concepts had changed very little since Henry Gantt got the ball rolling about 100 years ago.

We made the choice to go against the entrenched industry dogma we came to call “classic project management.” We recognized that the table stakes would be high. All of our big competitors like Microsoft Project had laundry lists of features, yet we were inspired by the traction and simplicity of Basecamp, one of the first lightweight task managers to find success on the Web.

If you’re going to be disruptive, you’ve got to be prepared to do what it takes to build a unique product. We knew it would not be enough to be a little different; we needed to be a whole lot more different than “Microsoft Project on the Web.” So we went back to the drawing board to rethink the problem space.

We knew we needed a long-term game plan because we had so much work to do to build a complete solution. We brought many ideas with us to the venture, but any complex product is a going to be a voyage of discovery. I like to summarize our journey by saying in version 1.0 we got our big ideas out, in version 2.0 we extended and polished them, and in version 3.0 we took everything we learned and redesigned the product from the ground up to make it awesome.

The key to the start was leading with our most innovative feature first. We were and still are the only PM tool with a probabilistic scheduling engine that generates statistically correct project schedules based on ranged estimates that take uncertainty into account. If you manage projects, this is a big deal because it gives you realistic schedules. You know that little problem that most projects fail to ship on time or on budget? Yeah, this engine addresses that awkward problem.

So in version 1.0 we had this break-through engine sitting on a chassis with four cheap tires and a throw-away wooden body. In fact, we threw the body away several times, as our approach from the outset was to be very fast and iterative. We filled in the gaps in version 2.0 and added collaboration features, comment streams, time sheeting and more.

It’s easy and fast to upgrade all customers at once over the Web and we ultimately had 27 incremental releases before we launched our current version 3.0, which was nothing short of an extreme make-over.

Making tradeoffs in the race to the market

Heading into our version 3.0 release, we knew we had to make a very tough strategic tradeoff. Like every company, we have limited resources. We needed to decide whether to focus resources and funds on improving the product through intensive “pedal to the metal” development or on selling and marketing the existing product. Should we invest in the needs of the present or in the needs of the future?

We decided to sacrifice investment in sales and marketing and pour our focus into product redesign instead, in hopes that it would pay off in the long run.

It’s very hard to tell your investors and your team that you’re sacrificing immediate growth for long-term customer satisfaction when conventional wisdom is obsessed with customer acquisition. On the other hand, if a company that makes planning software can’t focus on the long game, what does that say?

Entrepreneurial minds and established best practices

There’s been a lot of tech press recently on the success-factor differences between old entrepreneurs versus young entrepreneurs. Which matters most? Years of experience or fresh thinking?

I think that if you want to disrupt an old marketplace you need both. With LiquidPlanner we’re solving a very complex problem that has been around for a long time. The team at LiquidPlanner has managed hundreds of projects over the course of many years. That accumulated base of experience and customer empathy is invaluable to our process. Finding more productivity in a way that leaves teams more motivated is not a trivial product design challenge.

LiquidPlanner is literally the result of a long career building software tools. All the inspiration came together while working at Expedia, which is where I met LiquidPlanner co-founder Jason Carlson. Large companies are fertile ground for entrepreneurial minds because they always have problems that need to be solved, and they’re always looking for people who are willing to jump in and risk their personal reputation to work on them.

At Expedia, I ended up building the company’s first Project Management Office. At the time, we were running 400 projects a year with 400 developers divided across 40 teams. One could not ask for a more “robust” project portfolio challenge. What we found was that despite having a team of incredibly smart people, the best consultants, and knowledge of best practices, we still struggled with the basics of getting things done. We have since learned that many organizations are in the same situation. We decided the available tools deserved a huge part of the blame and did more harm than good; they were also really expensive. That seemed very wrong to us.

Like most entrepreneurial stories, luck and circumstance had their fingers in the equation. I had read and was inspired by one of Steve McConnell‘s books on software engineering. Steve is one of the top thinkers in software project management and, as luck would have it, we were located in the same city. We connected and Expedia ultimately sent 100 people through his estimation training.

Deeply experienced managers kept walking out of the training classes excited and ready to try ranged estimation and other best practices but no software tool on the market could handle the job. That was the “lightbulb moment,” circa April 2006, when Jason and I knew we could bring something better to market.

Steve’s latest book, “The Art of Estimation,” embodies this new way of thinking about project realities. The new way is not like the old way, so it’s worth a read. Steve and I have become friends in the process and he is now a formal adviser for the company.

Don’t grind the gears

Startups (and bigger companies) that have a long list of things to do and fail to make a plan will end up in a constant state of uncertainty and chaos that will turn people off. A lot of people are intimidated by planning because of years of exposure to bad project management tools. Yet a good plan is very empowering and reassuring. If your plan is bad, you either have a bad tool, bad estimates or both.

Creating a realistic plan with attainable goals is incredibly motivating and has an almost magical effect on performance. Most startup executives run their company like a 20-yard dash, but people can’t do hard-core races every day. It’s better to treat the business like a journey; you have to set a pace, manage people’s energy and pack a good map.

The project plan is your vision of the future; without it, your team won’t make good long-term choices. If you have a short event horizon, you’ll end up with a fire-fighting culture and burn people out. All entrepreneurs see the value in building a good financial model. I’m here to tell you that building and managing a good work management model is just as important.

We knew that it would take us a long time to innovate and be successful in our entrenched market, so we built a company culture around making tradeoffs constantly and quickly around a dynamic plan. Everyone in our company attends prioritization meetings called “Triage” on Tuesdays and Thursdays; and every new issue, idea, customer request and problem is prioritized in complete transparency. Of course all this work is organized in a LiquidPlanner workspace we call “Dogfood,” as in ”eating your own dog food.”

Executing a great plan takes great engineering talent

One of the other “gotchas” software startups need to be aware of is the challenge of attracting and retaining talent. You want strong engineers who are in it for the long run and are passionate about the software. This means you have technology planning to do alongside your business planning. Great engineers don’t want to slap together a product and then struggle to support it for five years. If you don’t have a planning category for Tech Debt, you’re missing something.

One of the things that worked well for us in this regard was that we decided early on to choose a cutting-edge platform called Ruby on Rails. Ruby is a no-brainer now; but at the time we started LiquidPlanner, it was a very speculative choice. There were few Ruby developers anywhere and even fewer in Microsoft country where we live.

We played a hunch because we believed that developers who were self-motivated enough to learn and be passionate about Ruby would also have the right entrepreneurial stuff. We got that one right and it was truly natural selection “for the win.” Ruby turned out to be a great platform strategy and we built a fantastic team with just a few Craig’s List ads.

One foot in the box, one foot out of the box

This leads me back to the question of which matters most in achieving success: entrepreneurial fresh thinking or entrepreneurial experience? Some challenges require both. In our case, deep experience is required to understand the needs of the market and empathize with the people making the purchase decisions. But we also have to think outside the box because we are trying to disrupt classic project management with social project collaboration, which is a huge change in perspective.

In the end, the result reflects the team that built it. I like to say LiquidPlanner is software with an attitude. Like an old man saying “Get off my yard,” our software says “No, you can’t overload your team and you can’t have 10 tasks all set to priority #1 – deal with it.”

Charles Seybold co-founded LiquidPlanner with Jason Carlson in March 2006. For over 25 years, Charles has been building software tools in one form or another. He has a bachelor’s degree in Computer Science from the University of Wisconsin-Madison and was a front-line software engineer for over 10 years before moving into program management and, later, executive management. Charles gained his Internet experience as part of the core Expedia development team as the company grew from startup to e-commerce giant. Watching some of the smartest people in the world struggle with managing process and projects led Charles to the realization that dramatically better tools were needed to address today’s project realities. Within the eye of that brainstorm, the idea for LiquidPlanner was born.